In addition, Netflix got into newer content deals with Fox Television Studios and AMC. However, Netflix didn’t renew its broad content deal with Viacom, but is looking to add select shows from Viacom Networks. In addition, Netflix heavily expanded its content offerings for children by signing deals with The Walt Disney Company (NYSE:DIS), Cartoon Network, Hasbro, Inc. (NASDAQ:HAS) and Dreamworks Animation Skg Inc (NASDAQ:DWA).
In 2Q13, Netflix struck the biggest deal for original content in its operating history with leading anime producer, Dreamworks Animation Skg Inc (NASDAQ:DWA). Under the terms of the agreement, DreamWorks will produce more than 300 hours of new original programming for Netflix based on popular anime characters and franchises of DreamWorks, and also from the library of Classic Media, which DreamWorks acquired in 2012. And the first slate of original shows under the deal, will kick-off in 2014 and will be available in all Netflix territories.
In addition, Netflix is bringing back second seasons of a number of its original shows including Hemlock Grove, LilyHammer, Orange is the New Black as well as House of Cards, which goes on to prove the company’s ambitions of turning into a full- fledged Internet TV Network.
Customers are tuning in; Dominates Internet video with 90% units.
In 2012, Netflix stated that the company’s total monthly viewing hit 1 Billion hours. And just in April 2013, Netflix CEO released data stating that in 1Q2013, the company’s cumulative viewing notched up to 1.33 Billion hours on a monthly basis, or 4 Billion hours for the first 3 months.
Accelerated subscriber viewing hours in 1Q13 further reinforces the conviction that the Netflix story keeps getting better. And with more unique sub additions in the near-term and long-term, total subscriber viewing hours will climb higher. According to the NPD Group, TV viewing through subscription video on demand (SVOD) increased 34% on a year-over-year basis in 1Q13.
And NPD’s Digital tracking showed that Netflix absolutely dominates the sectors with a whopping 90% share of TV video-streaming units in 1Q13. Netflix is substantially ahead of Hulu and Amazon.com, Inc. (NASDAQ:AMZN) for TV viewing–Hulu Plus has 10% share of TV Streaming and Amazon Prime accounted for only 2%.
Going forward
The domestic streaming subs of Netflix are expected to hit close to 30 million and the International unit should have subs of more than 7.5 million in Q2. Netflix will get substantial tailwind from the increased penetration and the usage of more-internet connected devices. As content consumption is largely platform agnostic, the customers should be increasingly choosing Netflix due to the tremendous value it provides to users. Netflix’s International business is still in investment mode at large, and can be a major driver of the company’s long-term profits as well. Netflix’s virtual monopoly in the over-the-top streaming business will lead to strong earnings in the future.
The article Netflix Has Solid Upside originally appeared on Fool.com and is written by Ishfaque Faruk.
Ishfaque Faruk has no position in any stocks mentioned. The Motley Fool recommends DreamWorks Animation and Netflix. The Motley Fool owns shares of Netflix. Ishfaque is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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